Sharing industry news, best practices and program highlights from experts in the field.

Category Archives: Government

Municipalities that partner with the NLC Service Line Warranty Program receive a revenue share from policies sold that can be dedicated to a wide variety of beneficial community programs. The City of Tucson, Arizona utilizes the funding to improve the city’s public park facilities. The following is excerpted from a recent newsletter article written by Paul Cunningham, Tucson’s city councilman for Ward 2.

There is some good news for those of you that live near Palo Verde Park: we will be expanding the pool and installing a splash pad. The project will cost about $85,000. Here’s another piece of good news: that $85,000 does not come from the city’s general fund, which means this doesn’t come from your tax dollars. The money comes from the service line warranty fund. You may have gotten a letter asking if you’d like a service line warranty. Five years ago, the city authorized the company that sells them to send those letters out. In exchange, the city gets a bit of the money generated. It is divided equally among the council wards. One of my priorities as a councilmember has been to make sure that our city pools are open and available to as many people as possible, and I was glad to find out that this money was available.

Many of the projects that we have been able to build in parks have been done through impact fees. Impact fees are small fees assessed on new homes built within the city. There are a lot of state-mandated restrictions on that money, however. For example, the money can only go to new projects. Building a new basketball court would be doable with impact fee money, but improving or fixing an existing one would not. Another legal restriction is that impact fee projects have to come off of a priority list from Parks and Recreation. The service line money, however, is spent at the discretion of your elected officials.

Councilmembers must consult with Parks officials (they will be managing what we build, after all), but it leaves us with more discretion and more ability to respond to community concerns.

That flexibility meant that over in Ward 1, they will be fixing playground equipment that was lost at Bonita Park due to vandalism. Ward 3 made some repairs in the basketball courts and Amphi Park and, with the help of neighborhood volunteers, has revitalized it. Ward 4 repaired old sidewalks at Lincoln Park. In Ward 6, seven neighborhood parks have gotten or will get new recreational equipment. None of those projects could have been funded with impact fees.

By the way, some of you that use the Fort Lowell Tennis courts have seen the repairs there. Those were also funded through service line money. Like I said, an important thing to remember here is that this is not general fund money (money that competes with fire, streets, police et cetera), but money collected from a voluntary program. The city collects between $85,000 and $90,000 in fees annually.

Sanitary sewer backups happen and it is not a pretty sight. Debris, grease, roots, pipe breaks, insufficient capacity and obstructions all cause sewage to back up into homes and businesses through basement drain pipes, sinks, toilets or shower drains. Even wet weather can contribute to the problem. The result is property damage, health risks, irate citizens and possibly lawsuits. This is just the beginning—the source of the problem has to be located, the mess cleaned up and the property restored. I hear a big “cha-ching.”

Because many homeowner insurance policies do not cover sewer backups, residents look to their government for help, assuming the community is at fault. To pinpoint the cause of the backup and responsibility, an inspection is needed to determine whether the problem is in the city’s sewer main or the resident’s sewer lateral. The sewer lateral is the pipe that connects the community’s sewer main to private homes and businesses. If the source of the problem is the sewer lateral, the resident is likely responsible for repairs to the sewer line outside of the house as well as the cleanup and repairs needed inside.

Communities can adopt various best practices to prevent sewer backups. Some suggestions from the Alabama Municipal Insurance Corporation (AMIC) could benefit your community. The AMIC’s Loss Control Division recommends a formal sewer cleaning and inspection program that includes:

Undertaking routine maintenance to address infiltration and inflow problems. Infiltration is excess groundwater that seeps into the collection system from surrounding soil and inflow is excess water from storms, roofs and other above ground sources.

According to 15th Century Dutch philosopher Desiderius Erasmus, “Prevention is better than cure.” In addition to adopting prevention programs, a public education program should be available to residents to explain the causes of backups and what can be done to keep sewer laterals in good working order. Homeowners should be advised of their sewer line responsibilities and that they may have the option to obtain sewer backup coverage under their homeowner’s insurance policy or through programs like the National League of Cities Service Line Warranty Program, administered by Utility Service Partners. If the cause of the backup is in a homeowner’s sewer lateral and the homeowner purchased a sewer service line warranty, the warranty would cover the costs of outside repairs subject to the policy limits.

Sewer backups can be costly and a public relations nightmare for a community. Some communities have adopted policies and developed programs to assist homeowners and businesses cope with the aftermath of sewer backups. Some examples of programs are:

Cathy Spain is a National League of Cities Service Line Warranty Program Advisor and President of The Spain Group. She works with private companies and nonprofits to design, analyze and promote local government programs. She’s held senior management, research and lobbying positions at the National League of Cities, Government Finance Officers Association, Public Risk Database Project and the New York State Assembly.

Recently, NLC joined local governments and water utility and industry leaders to call attention to the state of our nation’s aging infrastructure, the staggering need for water infrastructure investments and the impact that such investment would have on local, regional and national economies.

“Cities depend on reliable water infrastructure. It strengthens neighborhoods and puts people to work,” said San Diego Mayor Kevin Faulconer at a press briefing.

An op-ed in POLITICO by Mayors Ed Lee of San Francisco and Annise Parker of Houston addressed the urgency of improving the aging infrastructure below our cities. “In 2013 alone, Houston lost more than 22 billion gallons of water – 15 percent of the city’s total water supply – due to leaking pipes. That same year, there were 100 water main breaks in San Francisco.”

Rep. Tim Bishop (D-NY) speaks at the Water Works! briefing

A report released this week by the Water Research Foundation and the Water Environment Research Foundation, National Economic and Labor Impacts of the Water Utility Sector, is the first in the industry that looks at the job creation, labor market and economic benefits of 30 of the largest water and wastewater agencies based on actual capital programs and operating budgets.

The report found that these 30 utilities contribute $52 billion in economic output annually and support more than 289,000 permanent jobs annually. Over the next decade, these the utilities will put $233 billion into the economy – $145 billion in operating spending and $88 billion in capital spending.

While these investments are substantial, they “represent only a modest proportion of the nation’s unfunded water infrastructure needs,” the report states. “The Environmental Protection Agency has estimated the nation’s capital need over the next 20 years to be approximately $720 billion in total: $20 billion annually for drinking water infrastructure and an additional $16 billion per year for wastewater infrastructure.”

A congressional briefing, moderated by NLC Executive Director Clarence Anthony, showcased the report’s findings and the need for and impacts of investments in water infrastructure. Although the EPA estimates are substantial, Anthony said, “other estimates put the cost at more than $4 trillion to maintain and build a 21st Century water system. Clearly, the time is now to renew federal-local partnerships and reinvest in our water infrastructure.”

The briefing panel included representatives from utilities highlighted in the report, as well as a private sector representative. Julius Ciaccia, Executive Director of the Northeast Ohio Regional Sewer District, which serves the Cleveland area, said that the agency is spending $1 billion on water infrastructure between 2012 and 2016, with most of the projects and improvements concentrated in the inner city, addressing environmental justice issues. About 80 percent of that spending has a direct economic impact on the region.

Emily Lloyd, Commissioner of the New York City Department of Environmental Protection, said the city learn the risks associated with neglecting their water supply and water infrastructure 400 years ago with the Dutch settlers of New Amsterdam. With infrastructure dating to the mid-1800s, the city recognizes the need to improve their old infrastructure, as well as the need to build new.

Local governments are responsible for the vast majority of investment in water and sewer infrastructure. In 2011 alone local governments invested over $115 billion, according to the U.S. Census Bureau.

As with many local governments and water utilities across the country, Ciaccia and Lloyd discussed how water rates have risen and will continue to rise to help address the investment need, but that affordability especially for low-income populations is an issue both communities are grappling with.

Aldie Warnock, Senior Vice President of External Affairs for American Water noted that “our water infrastructure has to be safe and reliable, but it also has to be affordable.”

Alexander Quinn

Alexander Quinn, Director of Sustainable Economics for AECOM, presented the findings of the report, and noted that the jobs created by water infrastructure spending offers a higher return on investment in terms of jobs created than military spending or retail spending.

As with most sectors of the economy, the water utility industry is facing an aging workforce currently eligible for retirement or eligible in the coming decade. Ciaccia and Lloyd both saw this as an opportunity to develop a diverse next generation of workers through training and education, particularly in the areas of technological innovation.

At a press conference earlier in the day, Congressman Tim Bishop, Ranking Member of the House Transportation and Infrastructure, Water Resources and Environment Subcommittee, who also spoke at the briefing, said, “investing in water infrastructure is a win for everyone – the environment, the economy, and public health.”

The organizing participants of the events, including NLC, National Association of Counties, U.S. Conference of Mayors, American Society of Civil Engineers, Building America’s Future, National Urban League and the Value of Water Coalition delivered a message to President Obama and Members of Congress to:

Expand access to low-cost loan and grant programs for all water providers to accelerate water infrastructure projects across America;

Leverage private financing and partnership opportunities; and

Support workforce development programs that prepare the next generation of workers who will be stewards of our nation’s water systems.

For additional information, read the WaterWorks! press release and letter to President Obama and Members of Congress.

This post reprinted with permission from the National League of Cities.

As I travel around the country working with cities on a variety of projects, I see a trend evolving around public-private partnerships that is quite different than my experiences as a public official. In 1985, when I entered public office, the idea of working with private enterprise to advance the mission of government was viewed quite skeptically, if at all. Companies that approached cities to perform services were often shown the door rather quickly. In some cases, department heads would not even bring these opportunities to upper management, sensing that if a private company could do a service that had traditionally been done by the city, it would somehow reflect on the abilities of the department head or their staff. Additionally, if the typical city of the 1980s needed additional revenue or expertise, they could simply add it in the next budget cycle in the form of a tax increase or a personnel adjustment and it would be added to what was known as ‘municipal government.

Times have changed. Adding revenue in the form of a tax increase is probably the last thing that modern cities are proposing and adding personnel is also difficult as most cities are becoming ‘lean and mean’ with little additional manpower in the offing. Technology is also making this ‘80s mentality a thing of the past. When I came into city government, technology consisted of some rudimentary computers and a fax machine with paper that had a waxy texture and rolled around on the table in tightly formed rolls!

My first experience with public-private partnerships was the transferring of municipal waste services to a private company with the city still doing billing and fielding the calls for service. Who would have thought that companies were willing to take on one of the dirtiest tasks in the city? But it worked and now it is commonplace for private companies to handle all municipal waste from household to landfill or processing plant. Legal and engineering services were another natural area for firms with specific expertise to take on tasks previously performed by city attorneys and engineers. These seemed like natural and logical extensions of city services and the process took place with little or no objections.

Fast forward to 2014 and we see a plethora of firms offering to take on city services or work with cities to offer services to citizens that were unheard of just 30 years ago. How do we distinguish the good from the bad and when do we make the decision to ‘untether’ a service from traditional city control? The key points when working with firms to offer these services seem to be logical:

What is the background and expertise of the firm? When you are putting the name and reputation of the city behind any service or offering, the quality and expertise of the company are paramount. Do they have experience in doing these types of deals and are they recognized by oversight organizations like the Better Business Bureau or similar groups?

Is the service or offering clear and transparent? When entering into public-private partnerships, is there a full disclosure to the governing body and the citizens? Citizen resistance to public-private partnerships is generally focused on the vague or confusing aspects of the services or offering. Open and transparent dealings generally receive the best results.

Does the city and/or citizens get good value for the investment? If the city or citizen is not gaining value from the partnership, it makes little sense to outsource or partner with a private entity. Simply entering a partnership where the company is the only winner is shortsighted and misses the basic tenant of good government where the citizen comes first.

It is definitely a new day in government and public-private partnerships appear to be a common part of modern government. Finding the right partner who is offering the right service is the key to making this work. Citizens have embraced this new role of government and look to their leaders to make good judgments on their behalf. No longer is the expectation that government will provide the service, but that government is doing in-house what makes sense and, when needed, finding partners who can get the job done in a professional and ethical manner.

Jim Hunt is an Advisor with the National League of Cities Service Line Warranty Program. He is also the founder of Amazing Cities, an organization dedicated to excellence and leadership in government. Mr. Hunt writes, speaks and consults on issues that affect local government. He served for 27 years in public office and was President of the National League of Cities in 2006.